For many startups, the biggest challenge with claiming Canada’s Scientific Research and Experimental Development (SR&ED) tax credit isn’t innovation. It’s documentation.
“With increasingly powerful generative AI models, the [Canada Revenue Agency] now audits your process more than anything.”
The evidence behind months of development can be spread across different systems that weren’t designed to work together. Teams may track tasks in project-management systems like Jira, store code in GitLab, and share technical findings over Slack or Discord. By the time it comes to file the claim, pulling those scattered records into a clear account of who did what and when can become a major undertaking, increasing the risk of leaving valuable R&D funding on the table.
Tracking manually happens “more than you can imagine,” said Philippe Gratton, co-founder and head of product at Montreal-based Chrono Innovation, which helps companies turn engineering activity into audit-ready SR&ED documentation. “Most of the time, it’s the actual developers who have to go and enter how much time they spent doing what, and that can be inaccurate—and it’s usually late.”
The stakes aren’t small. The SR&ED program processed nearly 24,000 claims and distributed $4.6 billion in tax credits between April 2025 and March 2026, making it Canada’s largest federal R&D support program. For many innovators, securing a refund can mean the difference between moving ahead with hiring and product plans or scaling back ambitions.
That challenge is part of what led Gratton and his co-founders to build Chrono.
“With increasingly powerful generative AI models, the [Canada Revenue Agency] now audits your process more than anything,” Gratton said. “They want to understand how you discriminate SR&ED-eligible work from non-eligible work. They want to see the actual data and how it came to be, all the way back to how the company tracks the development details in what system and how all the systems are laid together.”
Track meet
GenAI has made it easy to draft a polished SR&ED narrative. But Gratton said the granular evidence underlying the claim—specific tasks, code changes, timestamps—is too complex to leave to large-language models alone. “We tried it. It never worked.”
Their answer was a platform that does something AI tools alone can’t: Chrono’s platform connects to the systems engineering teams already use, pulling together the digital trail created from day-to-day work—from code changes and assigned tasks to project updates, meetings, and internal discussions. That information is then organized into a detailed record of how time was spent, allowing companies to understand exactly what teams worked on and which activities may support a SR&ED claim.
The same underlying data can also help companies answer broader operational questions, from how work flows across teams to where resources are being spent.
“This data warehouse can serve multiple purposes,” said Gratton. “I can look at it as timesheets. I can look at resource allocation across my project portfolio. I can understand how much time we spend resolving bugs versus building new features.”
With filing deadlines approaching for companies with December fiscal year-ends, he noted that Chrono can rebuild up to two years of engineering records—including project activity and coding history—in “about 10 to 15 minutes,” even for larger teams.
Saving time and money
Chrono’s platform can also affect what companies pay to file—and how much of a refund they ultimately keep. Many businesses pay a percentage of the final credit—15 to 25 percent, according to Gratton—to consultants who prepare and submit an SR&ED claim. With much of the documentation already organized, less time is needed to put the claim together, which can reduce costs. Companies can also choose how they file, whether on their own, through an existing advisor, or with one of Chrono’s partner consultants.
“It saves them weeks, if not months,” he said. “All the data is there. It’s structured. It’s categorized.”
Gratton pointed to one Montreal company that calculated it could save more than $20,000 by moving away from an 18 percent commission model on a claim worth more than $200,000. Larger companies have reported annual savings of $60,000 or $80,000, he added.
For finance teams, the value is not just in filing faster, but in knowing earlier what an SR&ED claim may actually be worth. Once systems are connected, companies can track qualifying R&D activity throughout the year rather than waiting until filing season to estimate what may qualify. That kind of visibility can help prevent costly surprises that impact innovation.
“Let’s say you’re expecting a $500,000 tax credit based on your projections. What happens if you only get $100,000 because you were not able to properly defend your processes during an audit, or because you did not track your R&D investment trend before the end of the fiscal year?” asked Gratton. “That’s a pretty big gamble, given that SR&ED is often one of the largest revenue sources for growing companies.”
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Feature image courtesy Chrono.